All the time you hear about high frequency trading (HFT) and how damn fast the algorithms are. But I'm wondering - what is fast these days?
Update
I'm not thinking about the latency caused by the physical distance between an exchange and the server running a trading application, but the latency introduced by the program itself.
To be more specific: What is the time from events arriving on the wire in an application to that application outputs an order/price on the wire? I.e. tick-to-trade time.
Are we talking sub-millisecond? Or sub-microsecond?
How do people achieve these latencies? Coding in assembly? FPGAs? Good-old C++ code?
Update
There's recently been published an interesting article on ACM, providing a lot of details into today's HFT technology, which is an excellent read:
Barbarians at the Gateways - High-frequency Trading and Exchange Technology
You've received very good answers. There's one problem, though - most algotrading is secret. You simply don't know how fast it is. This goes both ways - some may not tell you how fast they work, because they don't want to. Others may, let's say "exaggerate", for many reasons (attracting investors or clients, for one).
Rumors about picoseconds, for example, are rather outrageous. 10 nanoseconds and 0.1 nanoseconds are exactly the same thing, because the time it takes for the order to reach the trading server is so much more than that.
And, most importantly, although not what you've asked, if you go about trying to trade algorithmically, don't try to be faster, try to be smarter. I've seen very good algorithms that can handle whole seconds of latency and make a lot of money.